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Texas ratepayers' price tag for new wind-power lines in billions

Texas ratepayers could be on the hook for $3 billion to $6.4 billion to build new transmission lines so wind-power turbines can connect to the state power grid, according to preliminary estimates released Wednesday.

The eye-popping cost projections by operators of the Texas power grid could equate to as much as $320 for every man, woman and child getting power from the grid, although the impact on individual bills remains unclear.

The money would be used to build lines that theoretically would encourage more wind-power development in the Panhandle and West Texas.

Wind-power advocates say the potential expense could be a bargain, saying that besides leading to cleaner air, the expensive new transmission lines will pay for themselves because of the zero fuel costs associated with wind power.

"There is no question that adding more wind energy to the grid will reduce the overall cost of energy to ratepayers, particularly as fossil-fuel prices increase," said Ned Ross, director of regulatory affairs for FPL Energy, the state's largest wind-energy provider.

But skeptics say consumers should watch their pocketbooks. They say that the giant price tag will get coupled with additional hidden costs and that much of the benefit from lower fuel costs will go to energy companies and not ratepayers.

"Anytime you're spending several billion dollars, that should be cause for concern for consumers," said Thomas Brocato, an attorney representing Fort Worth and other North Texas municipalities in utility matters.

Landowners could also lose thousands of miles of property through eminent-domain proceedings.

The projected expenditures are largely associated with the legal and regulatory cost of acquiring such right of way, along with the price of the big latticework transmission towers and wires needed to move power from the far reaches of the state.

The new cost estimates were released Wednesday as part of an extensive study on wind power by the Electric Reliability Council of Texas, the quasi-governmental organization that operates the state's power grid. ERCOT conducted the study as part of its implementation of Senate Bill 20, a 2005 law calling for special zones where the construction of transmission lines would potentially encourage wind-power development.

The ERCOT study describes five different scenarios and outlines the cost of construction within each scenario.

It also examines the potential location of new lines and spells out other engineering and technical details.

The study now goes to the Public Utility Commission, which will select a scenario within months and then sign off on a transmission construction plan within about a year, a spokesman said.

The price tags for the five scenarios are $2.95 billion, $3.78 billion, $4.83 billion, $5.46 billion and $6.38 billion.

The costs would be divided up among all ratepayers in ERCOT through a fee attached to bills and paid off over several years.

The least-expensive scenario could lead to 5,150 megawatts of additional wind power and would require about 1,600 miles of new transmission lines.

A single megawatt provides enough power for 500 to 700 households under typical operating conditions.

The most-expensive plan could be sufficient for 17,956 additional megawatts and require more than 3,000 miles of new transmission lines.

Public Utility Commission spokesman Terry Hadley said the agency's three commissioners will try to ensure that ratepayers get a good deal. He said the transmission construction could be complete within about five years.

"The commission will most likely begin reviewing this at their open meeting next week, and the cost is a large concern," Hadley said.

Wind-power advocates say the new transmission lines could pay for themselves because the cheaper wind power will replace more expensive power generated by fossil fuels. Ross of FPL Energy also said that the new transmission lines will serve other electric generators besides wind and that the state needs to invest in new lines to serve its growing population.

But critics have raised war- ning flags, noting that no state agency has undertaken an overall review of the relative merits and costs of pursuing alternative clean-air strategies.

Jeff Pollock, an expert testifying on behalf of a group of Texas industrial customers, told the PUC earlier that "what is known is higher transmission and [other] charges associated with new wind generation will increase the electricity costs paid by all consumers."

With almost 5,000 megawatts of existing generation, Texas leads the nation in wind power. ERCOT said wind generation would leap to 12,000 to 24,000 megawatts, depending upon which scenario the PUC selects.

However, because of the intermittent nature of wind, ERCOT depends on only about 8.7 percent of capacity when determining available power during summer peak hours.

Wind Power

Texas in 2007 extended its lead as the nation's No. 1 wind-energy state and hosts four of the nation's five biggest wind farms, says a new report by the American Wind Energy Association. Still, the proportion of electricity produced by wind in Texas is below a number of other states. Here's a look at how the states stack up.

Total capacity

In megawatts and as a percent of state's total electricity generated (a megawatt is 1 million watts):

Texas 4,446 (2.0 percent)

California 2,439 (2.6 percent)

Minnesota 1,299 (4.6 percent)

Iowa 1,271 (5.5 percent)

Washington 1,163 (2.0 percent)

Capacity added in 2007

(in megawatts)

Texas 1,618

Colorado 776

Illinois 592

Oregon 447

Minnesota 405

Largest wind projects in operation

(in megawatts)

Horse Hollow, Texas 736

Sweetwater, Texas 585

Peetz Table, Colorado 401

Capricorn Ridge, Texas 364

Buffalo Gap, Texas 353

Source: American Wind Energy Association

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